01
Nov

Cannabis Investors Should Look To Canada

Knowledge Centre

The U.S. market for cannabis is booming, holds immense promise for continued expansion but remains saddled with risks. With marijuana illegal under federal law, and the United States’ Attorney General Jeff Sessions continuing to question the wisdom of cannabis legalization — and even hinting at law enforcement crackdowns — investors in U.S. cannabis should be vigilant as they help to build one of the world’s next great industries.

Things are much different in Canada.

While Canada faces challenges covering everything from regulations to supply to manufacturing infrastructure, cannabis entrepreneurs and investors are not proceeding every day with the threat of national or provincial law enforcement professionals hampering business development and investments.

Advantages of Investing in Canadian Cannabis

  1. Lack of regulatory malice. Sure, as Ottawa and provinces hammer out laws and regulations there likely will be hiccups, as well as triumphs. But investors in Canadian marijuana companies do not need to constantly look over their shoulder, wondering if Ottawa will dismantle the cannabis industry. Legal, recreational cannabis is here to stay. In addition, signals from provincial governments so far have been encouraging, and Ottawa’s decision to permit edibles was a big step in the right direction.
  2. Banks are On Board. Cannabis is a multi-billion dollar industry in the United States, and fast-growing — some analysts call it the most rapidly expanding realm of commerce in the United States. Yet banking, the backbone of most industries, is absent. Many transactions are done with cash, and despite this hurdle the marijuana industry in the United States is positively effervescent. Cannabis entrepreneurs and business in Canada, on the other hand, can work with banks. Opening an account and processing credit and debit transactions — taken for granted in every other industry, but not permitted in the United States for cannabis companies — is straightforward in Canada. Lending involves more hurdles, but it is possible and many Canadian cannabis companies have developed strong relationships with bankers. The banking sector is helpful, too, for cannabis investors; simply put, banking involvement is essential for any industry, including cannabis.
  3. Nationwide sales and distribution. Growth in any business requires access to new markets. If you launch a potato chip company in Vancouver and it performs well, you then seek markets across British Columbia. After triumphs across the province, you start pursuing stores in Alberta. Soon, you are chasing fresh opportunities in Ottawa and Quebec and at some point, if your potato chips are awesome and your management team is savvy and hard-working, those chips are available from Whitehorse to Halifax. This growth model applies to nearly every sphere of business and in Canada that includes cannabis. Yes, laws might vary between the provinces, but with the “it’s legal” imprimatur of the Canadian government significant roadblocks are removed. Edibles companies and grows, for example, should be able to sell their products in provinces across Canada. Growth? In the United States growth has been tremendous, despite manifold complications including an inability to ship marijuana products across state lines. In Canada, the most vexing complications have been removed. Growth here could be powered with jet fuel.

Canada Ripe for Marijuana Investors

In sum, people and companies seeking investment opportunities in the flourishing marijuana industry have manifold opportunities, from grows to brands to ancillary businesses. Investors should strongly consider all of the above in Canada, the first nation in North America to legalize marijuana nationwide.

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